Ever heard of JA-Zenchu? Probably not, but you should definitely take a moment to get to know it a little better. It's an umbrella organization for Japanese agricultural cooperatives. In fact, among its members is the largest agricultural cooperative group in the world, the Zen-Noh, whose annual sales are around 62 billion U.S. dollars.
JA-Zenchu has traditionally been an instrument to develop Japan's agriculture; the official voice of agricultural producers with a major influence on policy. In fact, it is expressly mentioned in the country's laws and is thus protected. Some 700 local agricultural cooperatives look to JA-Zenchu for management guidance, training and education programs as well to promote their political interests. JA-Zenchu employs some 224,000 people. Rather conservative in nature, it represents nearly half of the country's agricultural production and 90% of farmers. It has made its position very clear, and strongly opposes any form of transpacific partnership accord negotiations that aim to establish a free trade zone around the Pacific Ocean.
It is understandable that Prime Minister Shinzo Abe, who wants the country to adhere to this commercial accord, is not very pleased with JA-Zenchu. As a supporter of market deregulation and of repealing the legal status that protects the powerful cooperative group, he devised a regulatory reform committee to study the situation and make recommendations. Their report was submitted last May. It proposed nothing less that the dismantlement of agricultural cooperatives and that JA-Zenchu be turned into a think tank to reflect on agricultural issues.
As the saying goes: When you want to drown a dog, you say it's got rabies… All of a sudden, the network of agricultural cooperatives was inundated by a wave of criticisms. They purported that their products were too expensive, that members were being pressured to buy products they didn't need, that JA-Zenchu had become an organization that existed only for itself and no longer listened to agricultural producers... Hard to judge from this vantage point. Nonetheless, JA-Zenchu' weak performance in the farming industry remains true. In a study published in 2012, I read that the group's financial equilibrium was assured by the activities of its banking branch, which has been regularly covering the losses of the agricultural sector.
Regardless, the proposed reform is no less than drastic and presents some extremely important issues for the cooperative movement as a whole. According to the group's vice president, Mitsuo Murakami, this reform would make it possible for more than half of cooperative administrators to not be members of the cooperative group. It would also let anonymous corporations own farm land. Murakami believes that this reform is a threat to the existence of agricultural cooperatives in Japan. Even the International Co-Operative Alliance (ICO), through its president, Dame Pauline Green, expressed its outrage: "The proposal, she declared, totally disregards the values and principles of co-operatives."
It is often said that the world cooperative movement has incredible economic power, but is a sad little dwarf when it comes to political strength. That's why the goal of the ICA is to increase its visibility on the public scene. Looks like this will be much more than wishful thinking: Dame Pauline Green is personally keeping watch. ICA quickly organized and sent a delegation to Japan to better understand the environment and conditions and mollify each party's position.
The government's proposal has since evolved and softened somewhat. After all, independence is one of cooperation's guiding principles and accountability is one of its key values. Within the next five years, JA-Zenchu will begin an in-depth and wide-ranging reorganization that will transform it into an efficient and competitive cooperative group focused on agricultural producers. In a world of perpetual change, renewal is critical and it's always better to stay one step ahead.